Forum Replies Created
My partner and I have sold one 'transportable' (ended up as a built on site, due to access) in regional South Australia and currently building a second.
I my experience buyers can be turned off by a cheap quality transportable versus a known brand.
I would wonder with all the heart ache (customs, freight etc) of importing a kit home it might be more profitable to purchase in Australia?
I like Duckster's suggestion, though I can never make the numbers work unless I am driving the truck myself haha!
Anyone else have experience with transportables?
Yes, very good point. Diminishing balance should be used to increase deductions in the early years.
It is an unfortunate tax outcome that when an asset is replaced under warranty you effectively claim your remaining depreciation over a longer time period. But I suppose you now have brand spanking new asset.
Scott, please forgive me while I geek out on tax. Please correct me if I have missed something.
My understanding is Livewildcard has involuntarily disposed of the original A/C unit and received a new replacement A/C unit.
Based on my understanding, for tax this means;
- You have a balancing adjustment on the disposal of your original A/C unit
- Adjustment = MV of new A/C let's guess $5,500 less WDV $3,000 = $2,500 taxable income
- The taxable balancing adjustment is offset to a minimum of zero by the cost of the replacement A/C unit, Adjustment $2,500 – Offset $2,500 = nil taxable income
- You reduce the opening value of the replacement A/C unit by any offset and start depreciating. MV Cost $5,500 less Offset $2,500 = Opening value $3,000
- So after all that you just have a new A/C unit depreciating at the same written down value as the original unit. However, the effective life of the asset restarts as you have a new asset.
- Isn't tax fun!
This information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.
Not an easy situation to analyse. Is the diagram below what you are trying to do?
Please click the link if the picture does not load
Question: Are contributions made into super taxed at a flat rate of 15%, or do they increase as you salary sacrifice more income into it?
Answer: Concessional contributions (where a tax deduction is claimed, or paid from pre-tax dollars such as 9% super guarantee or salary sacrifice) are taxed at a flat 15% in the SMSF. Non-concessional contributions (where no tax deduction is claimed, or paid from after tax dollars) are not taxed in the SMSF. Please note: If a member breaches the yearly contribution caps the SMSF may be liable for excess contributions tax (additional tax of between 31.5% and 46.5%)
Question: Can funds in SMSF be accessed by a member that has reached preservation age but has not contributed anything into the fund i.e. your parents, grandparents?
Answer: No, a member's funds are accessed by that member once a condition of release is met (for example retirement at preservation age). Exceptions to this general rule can be in cases of divorce or death.
Question: Is it compulsory to have insurance for members of the SMSF? If so, what companies are recommended?
Answer: As a part of new measures introduced on 7 August 2012, as trustee of an SMSF, you are now required to consider insurance for fund members as part of the fund's investment strategy. Definitely shop around if you are purchasing insurance.
Cheers
Richard
My understanding is the book makes reference to having multiple trusts (with corporate trustees) borrowing from different lenders.
The difference I believe is going to one bank and asking to borrow $450,000 in your own name, versus going to three different banks and borrowing $150,000 in each of three seperate trusts (and giving your personal guarantee to each seprate trust).
I believe the book also makes reference to this being a bit of a grey area… as it relies on the different lenders not picking up (and factoring in) your other personal guarantees… not sure I would recommend this strategy, however would love to hear others input.
Hi ptn,
Is your concern that you will earn too much income in the year you sell the land, and therefore pay high marginal tax rates?
Or is your concern about simply accessing the money tied up in the land and trust?
Regards
Richard
Dan42 wrote:Hi Emma,
It's calculated on taxable income + reportable fringe benefits + reportable super contributions + investment losses.Hi Dan, that is the standard income test for most items such as medicare levy surcharge and certain tax offets.
The super co-contribution income test is more strict. Taxable income is not necessarily used, instead total income (less business deductions) is used in the income test calculation.
Only allowable business deductions are taken into account. I.e. a work-related expense or a rental property loss is not taken into account.
Alternatives to a personal co-contribution might include a contribution on behalf of your spouse, which can get you a tax offset or claiming contributions as a tax deduction (if employment income is <10% of total income)
Eligibility
You may be eligible for the super co-contribution if all of the following apply:
you make an eligible personal super contribution by during the income year into a complying super fund or RSA and don't claim a deduction for all of it
your total income (minus any allowable business deductions) for the income year is less than the higher income threshold
10% or more of your total income comes from eligible employment-related activities, carrying on a business or a combination of both
you are less than 71 years old at the end of the income year
you are not the holder of a temporary visa at any time during the income year, unless you are a New Zealand citizen or holder of a prescribed visa
you lodge your income tax return for the relevant income year.http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/42616.htm&page=2&H2
Regards
Richard
Definately see your accountant, however I agree with Paul's post.
Issue is likely to be, whether you are repairing (immediate deduction) or improving (capital depreciation deduction).
Catalyst, interest can be claimed if a property is not available for rent so long as certain critea are met.
To this extent, if you were to purchase a vacant block of land, build a rental property, then rent it out you might be entitled to claim interest from the day you purhcased the block.Thanks to all for your comments, much appreciated.
I would also agree that LAFHA is unlikely to apply.
How does your employer report the housing allowance? Does it appear on your PAYG summary (group certificate)?
Also, do you know if your employer withholds PAYG tax from the housing allowance?
Thanks for the feedback Michael, much appreciated.
When I found this forum I was amazed at the talent and information available. I particularly admired your recent input into what looks like a tricky situation https://www.propertyinvesting.com/forums/getting-technical/finance/4338851
I just had to join in.
Congrats! I hope mum and baby are doing well.
It is necessary to declare your spouse details under certain circumstances. The biggest issues revolve around the medicare levy surcharge (ie private health insurance), child support debts and spouse related tax offsets.
Below is an extract from the 2011 income tax return;
Spouse details – married or de facto
If you completed any of the items listed below, and you had a spouse during 2010–11, or if you consent to use part or all of your 2011 tax refund to repay your spouse’s Family Assistance Office (FAO) debt, you must complete Spouse details – married or de facto.
We need the information included in this section to assess your tax accurately.Did you complete any of the following items or do you consent to use part or
all of your 2011 tax refund to repay your spouse’s FAO debt?T1 Spouse (without dependent child or student) tax offset
T2 Senior Australians tax offset
T3 Pensioner tax offset
M1 Medicare levy reduction or exemption
M2 Medicare levy surcharge – and you printed X in the NO box at E
T7 Superannuation contributions on behalf of your spouse (on the supplementary
section of the tax return)
T10 Parents, spouse’s parent or invalid relative
T13 Entrepreneurs tax offset (on the supplementary section of the tax return)Also, definition of spouse is;
http://www.ato.gov.au/content/00216880.htm
Your spouse includes another person (whether of the same sex or opposite sex) who:
- you were in a relationship with that was registered under a prescribed state or territory law,
- although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.
"Under this condition, less than 10% of the total of the following must be in respect of your employment activities:
- your assessable income for the income year
- your reportable fringe benefits for the income year
- the total of your reportable employer super contributions (RESC) for the income year. "
